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Articoli E Saggi State Intervention, Economic «Il diritto dell’economia» issn 1123-3036, anno 64, n. 97 (3 2018), pp. 797-823 Articoli e saggi State intervention, economic constitution, and the so-called “principle of subsidiarity”: the Brazilian debate Luiz Augusto da Silva, Melina Girardi Fachin Summary: 1. Introduction – 2. What is subsidiarity? Some concepts and possible origin – 3. Interlude: a few remarks on principles and constitutional interpretation – 4. Sub- sidiarity as a “principle” of the constitutional economic order – 5. A counter-argu- ment: constitutional commitments and the multiple economic possibilities for the State. Reasons to reject the constitutional status of subsidiarity – 6. Constitutional adjudication beyond subsidiarity: lessons from a Brazilian Supreme Court Ruling (ADI No 1.923/DF) – 7. Conclusion. 1. Introduction «I put the Brazilian economy back on its feet. Now we may advance. I shall not let the Country move backwards» – said Brazil’s president Michel Temer on Twitter in early March, 2018. Undoubtedly powerful, the statement is a comment on the perceived government’s success in reigniting economic growth after a grave two-year period of recession, still echoing from the leadership of its predecessors. But there is no denying it is also symptomatic of a far more decisive political issue: once again in its recent history, Brazil seems to be facing a moment of reassessment of the functions of the State in promoting social and economic development. Following a somewhat global trend, concepts such as privatization of state- owned companies, market liberalization, de-investment of state-controlled assets, reinforcement of public-private cooperation and so forth are on the spotlight of Brazilian public agenda. The movement is especially striking in some of the lat- est economic initiatives launched by the federal government. A new wave of pri- vatization projects is announced, perhaps just as substantial as the one conducted during the 1990’s reforms, which covers at least fifty-seven of federal state-owned 798 Luiz Augusto da Silva, Melina Girardi Fachin companies including its electric sector juggernaut, Eletrobrás 1. In 2016, the gov- ernment created the Partnership in Investments Program («Programa de Parce- rias de Investimentos» – Law No. 13.334/2016) as an endeavor to heat up para- lyzed large infrastructure projects delegated to the private initiative: Among the program’s basic ground rules there are «ensuring stability and legal security, with minimal intervention in business and investments» (article 2nd, IV). Whether these strategies will be successful in reaching their announced end- game – mainly, the reduction of public deficit and the promotion of sustainable growth – is yet to be seen. It comes as no surprise, then, that economists most cer- tainly have much material on which to work. With every new policy come new challenges: on the efficiency of its instruments, on its practical consequences to the overall economy and, ultimately, on its very effectiveness to the development aspirations of our society. As constitutional lawyers, however, our concerns lie a few steps back. All the current agitation towards the private sector seems to give reason to a prominent line of Brazilian public law theorists in general, and of constitutionalists in partic- ular: those who support a “constitutional principle of subsidiarity” to guide the State’s efforts in the economy. In a preliminary definition, as an economic – and constitutional – guideline, the “subsidiarity” ideal holds that individual freedom of initiative is to prevail over State intervention; the free market, over public action, planning and coordination. Only when individuals and the market mechanisms fail to achieve their purposes is the State authorized to legitimately interfere with the economy – preferably to correct market flaws and encourage the private sec- tor; as an absolute exception, to engage directly in economic production. The State should be doing less, and the market, doing more: The State, thus, should remain “subsidiary” in relation to the private sector in a pursuit for development. This article presents a counter-argument, from a strictly legal standpoint, on this perception. Make no mistake; this is an essay on constitutional law and interpretation, not on economics 2. Our objective is this: to construe a compe- 1 Eletrobrás – Centrais Elétricas do Brasil S/A – is a Brazilian federal public-controlled mixed-capital company, currently the largest national operator in the electric sector. A Presidential act enacted on Decem- ber 2017 sought to include the company in the National Privatization Program (Law No 8.031/90, followed by Law No 9.491/97) in order to begin the studies and the processes for the sale of many of its assets – includ- ing its corporate control – to the private sector. By the time this article was written (early 2018), the privatiza- tion initiative was being debated in Brazilian Parliament, which may or may not uphold it, and has been cause of great divide among representatives. 2 Despite the great contemporary appraisal of theoretical approaches such as the “Law and Econom- ics” and the “Economic Analysis of Law” (in many cases, well deserved), this article takes a different method- ological path: it holds the premise that the Law is to some degree independent from the economy, and that it has (=should have) autonomy vis-à-vis economic considerations of efficiency, maximization of wealth and other similar criteria. On the autonomy of Law in relation to the economy: M. Barbosa, A recusa de conformação do State intervention, economic constitution 799 tent reading of the Brazilian constitutional economic system 3 in order to test the claim for a “subsidiary State” entrenched in it. Being essentially legal-oriented, our arguments will be normative and conceptual, not empirical, descriptive ones: it isn’t to say whether the Brazilian State actually performs a subsidiary role in the economy – chances are that it still does not –, but rather if the State necessar- ily must, on constitutional grounds, aspire to restrain itself in all circumstances to some sort of subsidiary routine. And, if not, what ought to be the alternative, if read in its best light, our Constitution may offer. 2. What is subsidiarity? Some concepts and possible origin When it comes to a discourse on a “principle of subsidiarity”, be that in any social science, nothing is quite evident – starting with its very origins and meanings. For the purposes of this article, our interest falls upon a “subsidiarity” as a social, political and economic – as well as, subsequently, constitutional – notion. Bearing the risk of some oversimplification, one might say that subsidiarity is a philosoph- ical principle aimed at governing, in a normative and very comprehensive manner, the multiple interactions between the individual, civil society and the State. According to this principle, in a fair, decent community the individual must be, at first, left to her own devices to achieve her personal goals and realization. This derives from the deeper conviction that every human being is entitled to a special dignity of her own – the idea of “human dignity”, an intrinsic, inalien- able value in each and every human life – which can only be fully realized by the exercise of her autonomy, demanding respect from other individuals and institu- tions 4. By guaranteeing individual freedom of self-determination the principle of jurídico pelo económico, in Boletim de Ciências Económicas: homenagem ao Prof. Doutor António José Avelãs Nunes, vol. LVII, t. I, Coimbra, 2014, 641 ss. 3 The Constitution is regarded here not only as the legal expression of the fundamental political order, but also as the legal expression of a fundamental economic order. On the concepts of an “economic constitution” and of “constitution as the fundamental economic order” – of which a subsidiarity principle of State interven- tion may or may not be an element: V. Moreira, Economia e Constituição, 2ª ed., Coimbra, 1979, 41 ss.; A.C. dos Santos; M.E. Gonçalves; M. Manuel Leitão Marques, Direito Económico, 5ª ed., Coimbra, 2010, 30 ss.; M. E. Azevedo. Temas de Direito da Economia, 2ª ed., Coimbra, 2017, 53 ss. 4 Although referring to a discussion on subsidiarity and International Law, the following remarks are applicable to subsidiarity as a philosophical ideal in general: “Its [subsidiarity’s] basis is personalistic, rather than contractual or utilitarian. That is, its first foundation is a conviction that each human individual is endowed with an inherent and inalienable worth, or dignity, and thus that the value of the individual human person is ontologically and morally prior to the state and other social groupings. Because of this value, all other forms of society, from the family to the state and the international order, ought ultimately to be at the service of the human person. Their end must be the flourishing of the individual.” (P.G. Carozza, Subsidiarity as a Structur- al Principle of International Human Rights Law, available at: http://scholarship.law.nd.edu/law_faculty_schol- arship, access in 20/02/2018, 42). 800 Luiz Augusto da Silva, Melina Girardi Fachin subsidiarity, as its partisans present it, would also be reverential to the pluralism of word-views existent in modern, complex societies 5. From this baseline view on human dignity and pluralism comes a directive of coordination of action among the individual and the multiple social bodies. All social groupings, like the family, the city, the State, international organiza- tions, etc. exist to provide the individual person the help and the support she may require in her quest for self-fulfillment – not to destroy neither to absorb her. Also, lesser associations should ab initio be able to freely govern the persons who belong to them, for this would ensure not only that decision centers be closer and more sensible to the interests of those affected (subsidiarity in its vertical sense), but also that the definition of the general interests pursued by institutions be devised with citizen participation (subsidiarity in its horizontal sense) 6.
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